Though originally posted as a comment here, I don't see an answer. So please allow me to resurrect and broaden this question, to all investment-grade bonds: in other words, 'BBB- or higher by Standard & Poor's or Baa3 or higher by Moody's.'.
Why should the prices of these
[highly rated bonds from pension funds, mutual funds, etc. because of their investment mandates]
bonds drop? Isn't there always a demand for ... [investment-grade] bonds with more than 10% coupon?